Abstract
The 1930s American Dust Bowl was an environmental catastrophe that greatly eroded sections of the Plains. The Dust Bowl is estimated to have immediately, substantially, and persistently reduced agricultural land values and revenues in more-eroded counties relative to less-eroded counties. During the Depression and through at least the 1950s, there was limited relative adjustment of farmland away from activities that became relatively less productive in more-eroded areas. Agricultural adjustments recovered less than 25 percent of the initial difference in agricultural costs for more-eroded counties. The economy adjusted predominantly through large relative population declines in more-eroded counties, both during the 1930s and through the 1950s. (JEL N32, N52, Q15, Q18, Q54)
Highlights
The 1930's American Dust Bowl was an environmental catastrophe that greatly eroded sections of the Plains
The empirical analysis focuses on specifications that control for differential changes over time that are correlated with the reported county characteristics in 1930 and lagged values of the characteristics
The primary effect of Dust Bowl erosion was to decrease lands’ potential for agricultural production, so a natural starting point is an analysis of changes in the per-acre value of farmland
Summary
In the late nineteenth century, agricultural production began to expand substantially on the American Plains. Hansen and Libecap (2004) present evidence that externalities contributed to the Dust Bowl: while farmers could discourage wind erosion by fallowing land or converting cropland to grasslands and pasture, much of the benefit would be captured by neighboring farms. The adjustments included converting cropland to grassland, planting alternate strips of cash crops and drought-resistant crops, and fallowing land with productive cover.. The Dust Bowl was unexpected and likely increased farmers’ expectations of future drought and erosion in all areas of the Plains, or at least created substantial uncertainty. Conservation incentives may have contributed to aggregate decreases in cropland and increases in fallowing By contrast, it was observable which particular lands were eroded after the Dust Bowl. Relative adjustments to the Dust Bowl should reflect the substantial decrease in productivity due to soil erosion. There is little empirical evidence, that separates Dust Bowl migration and agricultural adjustment from aggregate changes in Plains’ population and agricultural production.
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